Two pieces of
recent Brexit news are that a majority of the ‘war cabinet’
May on the choice between two unworkable, and therefore unacceptable
to the EU, proposals to keep the Irish border infrastructure free,
and Labour plans not to support a Lords amendment to keep the UK in
the Single Market (SM). I want to consider each in turn.
and their followers who just want to be PM and are signaling to party
members, have put their collective foot down over the Irish border. This could imply that May
will have to finally break with the Brexiters. But first she will try to do what she has done
since negotiations began, which is to find a fudge that is good
enough for the EU and which just keeps the Brexiters on board. I have
no idea if such a fudge is possible, but suppose she manages to
achieve one and prevents a revolt from the rebels in her party, so we
leave in 2019 as planned.
If that happens, we
are in danger of having perpetual Brexit. A final deal cannot be
fudged, and the reality is that no deal is possible that will keep
the Brexiters happy and be acceptable to the EU. The stumbling block
is the Irish border: the EU will not negotiate an FTA that requires a
hard border, and the Brexiters will not accept either the UK staying
in the Customs Union (CU) and SM for goods, or a border in the Irish
Sea. A crunch point could come at the end of 2020, but to avoid that
May will plead for an extension which the EU may grant. And so it
will go on: perpetual Brexit.
In a strange way, it
is in May’s interest for this to happen. No one thought she would
last for more than a few years after the 2017 fiasco, but Brexit
keeps her in place. The majority of the parliamentary party dare not
allow her to go because they will get a Brexiter in her place, given
that it is members who ultimately decide. Furthermore, the closer we
get to 2022 the less the party will want a bust up over how
transition ends, so she fights another election.
If she wins the 2022
election would that finally give her the confidence to do a deal with
the EU and ignore the protests from the Brexiters? Two factors
suggest not. First, the new intake of Conservative MPs could
mean that she would lose a vote of no confidence over Brexit. Second
the right wing press, with the election out of the way, might not
hesitate to call betrayal if she agrees any kind of deal with the EU.
Both the press and Brexiters, knowing that BINO was not at all what they had
in mind, would be looking to break off negotiations with the EU and
go for No Deal. If she gets an outright majority a deal that puts a
border in the Irish Sea becomes possible, but I doubt she will take
it or the party will allow it.
The underlying logic
is simple. For Brexiters, transition is only bearable because they
see it as a stepping stone to a hard Brexit. The EU will not
negotiate an FTA without a border in the Irish Sea and no hard border
in Ireland. These are irreconcilable positions, a point which the
media have just not taken on board. So if May does fudge her way to
agreement on the withdrawal bill, it means perpetual Brexit
negotiations. Transition, or Brexit in Name Only (BINO), may not
sound too bad, but it means never ending uncertainty because business
cannot rely on this arrangement lasting decades.
One way to stop
fudge is to force the government to break with the Brexiters. One of
the difficulties Tory rebels will always have is that it is difficult
to vote against a final deal that is fudge, because just as with the
original Leave vote fudge can mean almost anything the fudgers want
it to mean to get votes. As the polls I discussed here
show, it is only by talking about something concrete that voters say
wait a minute that was not my Brexit. Which is why votes on Lords
amendments to the UK’s withdrawal bill to stay in a CU and (tomorrow) the SM via the EEA can be so useful.
Conservative rebels think
that with Labour’s support they could win both votes in the Commons. But while Corbyn has been persuaded to back the rebels on a
CU, he appears unwilling to do the same on the SM.
I have talked a lot
about Labour’s triangulation strategy. That strategy works best
when all those who want something that is softer than Theresa May’s
Brexit think Labour in reality wants what they want, whatever Labour
might actually say. In a purely two party system with rational voters
Labour can get away with disclosing that they really only want a
slightly softer Brexit than May, because Remainers have nowhere else
to go. But reality isn’t like that in two important respects:
Remainers can vote for the LibDems or Greens (many thought the Greens
would be hammered in the local elections - they gained seats), or they can not vote at all.
Until now, I think
we have evidence that Labour has largely succeeded in being all
things to all those wanting something softer than May, including
those who want to Remain. But as crunch time comes closer this is
going to be difficult to sustain. So what does whipping your Lords
against voting for the EEA option disclose: that, as long as May is
in charge, you are content to see the UK leave the Single market. 
That might firm your support among some Labour leavers, but it pisses
off all Remain supporters and those Leavers who want to stay in the
I think this is a
mistake, although I am happy to have experts tell me otherwise. I
think it is a mistake because you will lose more votes from
disillusioned Remainers than you will gain from reassured Leavers,
even when you allow for where each are in parliamentary seats. I keep
being told that this is the Tories Brexit, but the moment Labour
enable it they become complicit. If car factories in the North East
go because we leave the SM, they cannot claim this is not our fault
because we abstained on a vote that could have prevented this. Voting to stay in the SM indicates economic competence, which always matters in elections and particularly matters for Labour.
It also seems like a
political mistake beyond votes and reputation. The theory seems to be that a vote to
stay in the CU, which the Lords did pass with Labour’s help, will
do all the required damage to May. But there are those who argue that
such a vote can help her, by giving her an excuse to ignore the
Brexiters and do a deal. The Brexiters will be furious, but what can
they do at the end of the day, as May can defeat any vote of
confidence because Conservative Remainers do not want a leadership
election. Wth UKIP dead, they have nowhere to go. May, free of the
Brexiters, might even achieve a final deal by 2020 (although crossing
her own red lines to do so), and fight the subsequent election as the Prime
Minister who got Brexit done.
Which is a long
winded way of saying that a vote on the CU may not be enough. If
Labour does kill a vote on the SM, they lose another chance to cause problems for May, and this time over an issue she really does not want to
lose. Put simply by doing this Labour may be passing up a chance to
do great, and possibly terminal, damage to May’s leadership. So the
Lords decision looks bad in terms of votes, and bad in terms of
importantly it is also bad in principle. Staying in the SM as well as
the CU is the right thing to do if someone else is doing the
negotiation. We need to stay in the SM for goods to avoid a hard
border in Ireland, and therefore to get a deal with the EU. But the
UK is really strong in exporting services, so leaving the Single
Market for services is just another act of self harm. I have always
been worried, since my time on Labour’s EAC, that the leadership
underestimated the damage leaving the SM could do. And if truth be
told the Leave vote was won on false pretenses, which means few voted
Leave thinking they would be poorer. Which is why there is no mandate
to leave the Single Market.
To those who say
that Labour have to appease those who voted Leave in our traditional
heartlands I would say this. Past Labour leaderships have for many
years neglected their traditional heartlands, partly in efforts to
appeal to the middle class and partly by embracing neoliberal ideas.
They have subsequently tried to win back their traditional base through
appeasement over immigration.
It did not work then, and it will not work now with Brexit. You win Leavers back to Labour by focusing on the
economic issues that matter to them, and not by votes in the House of
Appeasement over Brexit is a mistake because Labour alienates its base, just as happened with austerity and immigration. It is time Labour stood up for its principles, which include better public services. Leaving the Single market
will mean less money for public services , which is why 87% of Labour party members want to stay in the
Single Market. Leaving the Single Market is a policy that should be opposed, not enabled.
Postscript: The Lords amendment was passed by 247 votes to 218. 83 Labour and 17 Conservative peers defied their party and voted for the amendment. Only 3 Labour peers voted against the amendment. Jeremy Corbyn now has to decide whether he regards leaving the Single Market as more important than inflicting what could be a mortal blow to Theresa May.
 We need to
dispense with one red herring here. Abstaining does not mean
neutrality. If the Lords amendment succeeds it puts the issue on the
table, and Conservative rebels think they have the vote to support it
with Labour’s support in the Commons. If it fails, it is less
likely to be resurrected in the Commons. To say that the EEA option is not Labour's preferred option is irrelevant because they are not in charge and they have limited influence on the outcome. This vote is one point of influence, and they have gone for the worse option.
 Whether they
intended it or not, the writings of MMT seem to have convinced many people responding to me on
twitter that lower UK GDP has no implications for the level of UK
public services. Lower GDP, caused by lower labour productivity because Brexit diminishes UK trade, reduces the resources available to go to
private and public consumption. The only way you can avoid less
resources going to public consumption is to cut those going to the
private sector. Nothing in that statement contradicts or can be
changed by anything in MMT theory. If resources are underutilised they should be fully utilised, whether we are in or out of the EU. This is not about utilisation of resources.